Sustainability of Mineral Supply

and Government Policies

Prof. K. Pathak
Department of Mining Engineering
IIT Khargpur

With best homage to

Late Prof K K Chatterjee
(Formerly Chief Mineral Economist,
Indian Bureau of Mines)
 
What you normally know……………..
• Sustainability of mineral supply is security-centric: Mineral Security is sustaining the
availability of minerals
• raw materials are fundamental for many sectors of the economy, including the
automotive, electronic, and manufacturing industries: security of raw materials for
the industries is a critical requirement
• In contrast to sustainable development of mineral resources which is welfare-centric
• Security of mineral supply already a burning concern of the highly industrialized
European countries
• In fast industrializing countries like India it’s beginning to be a formidable roadblock.

Many Technologies utilize a wide range of minerals in vast quantities

Mining must continue and grow for the foreseeable future to ensure that such minerals remain available to industry.

Mineral supply for sustainable development requires resource governance

In the EU, over 24.6 million jobs currently depend on the

secure supply of raw materials.
 A conflicting situation

• Mineral Exploitation is a need for economic profit, material benefits &

success at all costs resulting in more and more industrialization.
- Population increasing
- Living standard rising
- Legitimate right of low-income countries to be at par with
high-income ones
- No alternative to increased industrialization
• Environmentalism demands Preservation of the Earth’s environment,
protection of the biodiversity and reversing or slowing down of the
human-induced global warming even at the cost of industrialization
 Importance of minerals to human life

• Long history of use of minerals

• At the beginning flint was the backbone of economy—hunting, clothing,
defending and later lighting fire, cooking etc.
• Next mineral clay 8000 BC—building bricks, pots for cooking & storing
grain
• Then metals—copper, tin, lead, zinc, iron (1800 BC).
• Industrial revolution (later half of 18th century)—new goods & services
• World War-II—atomic power, IT & communication explosion
• Now over 3000 minerals reported of which 1800-2000 fully studied &
described
• Only a little over 100 minerals , metals & rocks being gainfully used.
• Basic raw materials for agriculture, agro & other industries
• Even in environment protection equipments, minerals required.
 Importance of minerals to human life (contd)

• New materials include electronic chips; highly special glass and

advanced ceramic products; the metal-matrix composites; special
alloys and super-alloys; semi-conductors; laser; radar; super-
conductors; components of space ships; materials for artificial
human organs; nano-tubes; materials required for geo-
engineering, for environmental hazard mitigation and for
generating fusion energy
• Future mineral commodities will be graphite, fullerene, helium,
zeolite, quartz, micro-diamonds and metals like rare earth metals
• But, 2 mineral commodities have all along stood out as the
foundation of human civilization
 Importance of minerals to human life (contd)

1. Aggregates:
- Clay, sand, stone chips
- Their availability always taken for granted
- But their requirements in very large quantities
- Large scale indiscriminate & unsystematic digging of the land has caused
irreparable damage & threat to
# Landscape
# Topography
# Groundwater recharge
# Supply of river water during summer months
- On February 27, 2012 the Supreme Court of India made EIA mandatory
before mining of aggregates
- State govts stopped granting permits
- Acute scarcity in many states of India & in many countries (e.g. Europe)
 Importance of minerals to human life (contd)

2. Gold:
- Reference of exchange of goods and services throughout its history
- Now cornerstone of global monetary system (Breton Woods system)
- Strength of country’s currency depends on the amount of gold held in
reserve by its central bank
- Prime mover of all investments for exploration activities
- Now, price of gold has become a cue for investment in mineral exploration
- In India there are huge stocks of gold maintained in households for
perceived security purpose (20000 tonnes in 2012 & demand is double in villages
compared to towns according to WGC)
- Tendency to acquire & stock more and more gold stronger when the level
of insecurity of the people and the governments is higher on account of
deteriorating political conditions, weakness of US $ & economic recession. -
Hence, this metal has assumed special importance for mineral industry &
humankind.
 Options for mineral raw material security
Political/military control
• Wars fought from the Roman times to the 21st century for acquiring control over
mineral deposits
• Focus on gold, silver, mercury, iron, copper, lead, tin, salt, guano, saltpetre,
petroleum and various precious stones
• destructive military approach to ensure raw material security is increasingly
becoming more difficult.
• Reasons: -
- Wars require huge resources of arms & ammunition and other economic
commodities like food all of which require minerals
- No country is self-sufficient in all the minerals needed to fight highly
sophisticated & complex wars of today
- Resources spent destructively with no guarantee of victory
- UNO, IMF, World Bank etc. make wars very difficult to sustain
- The very insecurity prevents a country from indulging in a gamble like war
 Options for mineral raw material security
Recycling

• Contributes to extension of life indices of reserves

• recycling rates (ratio of the annually utilized quantities of
scrap and the annual production of the primary metal)
depends on:
- Scrap collection efficiency
- Life cycle of product containing a metal (1 year for Al to
40 years for Cu cables
- Amenability to technology of recovery of metal from the
scrap
- Environmental problems arising out of the recovery
process
 Options for mineral raw material security
Recycling Contd
• Technological challenges:
- Energy intensivity (e.g. Al)
- Recycling of Cu in alloys & electronics highly complex
- Cables require burning of plastic sheath
- Zn less amenable due to its lower position in electrochemical series w.r.t.
many metals.
- recycling zinc in galvanized iron & steel sheets, requires cost-intensive
plasma furnaces
- Recovering metals (Cu, Au, Ag, Pt, Co,, REE) from e-waste (discarded
computers, mobile phones etc.).
- 150000 tonnes of e-waste generated in 2006 in India
- Annual growth in India projected at 34%
- Global e-waste generation growing @ 40 mln t/ year
 Options for mineral raw material security
Recycling/e-waste Contd
• Up to 60 different scarce metals like gold, silver, palladium, cobalt & REE
- One tonne of discarded computer ---more Au than in 17 tonnes of Au-ore
- Discarded cell phone ---5-10 times higher Au than Au-ore of same weight
- REE
# Demand by wind turbine and electronic industries growing # Practically entire
known global resource (95%) & production (90%) controlled by China
# Japan is largest consumer dependent wholly on import from China
# Currently, hardly 1% of these metals used is recycled
# China increasingly cutting down export for environmental & political
reasons
# Increased expl efforts in USA, Canada
# Japan pushed up efforts to mine in other countries (India) through JV &
recycling
# Availability liberal credit
 Options for mineral raw material security Contd
Substitution
• Extends life indices of reserves
• Modes:
1. Development of alternative materials in certain applications
- same end purpose
- only intermediate product & technology substituted
- E.g. for steel manufacturing, sponge iron may substitute pig iron
2. Both product & application change
- Technology remains same
- End purpose not compromised
- E.g. For generating wind energy , high-temperature ceramic superconductors
may replace permanent magnets in wind turbines thus dispensing with neodymium &
dysprosium
3. Partial substitution of raw materials by renewable waste materials
- Neither processing technology nor product changes
- E.g. For cement manufacturing coal may be replaced by rice husk, cashew nut shells, used
tyres, garbage etc.
 Options for mineral raw material security
Substitution Contd
• Reasons for substitution
- Finite & non-renewable nature of min resource (E.g. Natural cryolite
substituted by synthetic cryolite)
- Fixed location (relevant from national/regional point of view
- Long gestation (15 + years from date of application for RP to production)
- International relation (relevant in case of dependence on import)

• But no possibility of doing away with non-renewable minerals altogether.

- Even if renewable material is used, technology for its processing will
require non-renewable minerals
 Options for mineral raw material security Contd
Mine-waste utilization
• Generate:
- Before mining
- During mining
- After mining
• Reasons:
- Overburden: - rocks dumped overground as wastes; quantity more for deep
seated deposits
- Grade: - Low metal to gangue ratio in ores of high-value metals (1:99 in Cu
ores, 1: 500000 in Au ore)
• Waste rocks generated every year during production:
- Cu 1.4 billion tonnes
- Au +1 billion tonnes
- Al 50 million tonnes (red mud)
• Utilization of such wastes being addressed (e.g. fly ash bricks, road embankments, back-
filling etc)
 Options for mineral raw material security Contd
Foreign sourcing
• Import: -
- Necessary for a country under conditions of
(a) Resource deficiency
(b) Resource abundance
~ as a strategy for conservation of domestic resource
~ inability to exploit domestic resource under formidable hurdles (e.g. coal & iron ore
in India)
- Critical issues
(a) Judging the best price to purchase (not possible in case of long term contract)
(b) Funds required for stockpiling (both purchasing & maintaining stocks
indefinitely) (c) Special storage facilities for petroleum & natural gas
(d) Possibility of UN sanction against a country & hence multiple sourcing
(e) Paying for import through export of another commodity, Au, $, €
 Options for mineral raw material security
Foreign sourcing (Contd)
• Acquisition: -
- Criteria of investment now gone beyond economic outcome
- Redressal of environmental and socio-political problems primary
- Launching a mining project in virgin areas in some countries becoming
harder, more time-consuming and more expensive.
- In recent times emergence of technologies has made exploitation of
uneconomic/discarded mines and deposits by large cash-rich companies
attractive.
- Easier for such companies to take the acquisition route in an investor-
friendly foreign country than taking up greenfield projects in own country.
- Modalities—
(a) Acquisition of a mining company
(b) Merger with another mining company
(c) Acquisition of a virgin mineral property
 Options for mineral raw material security
Foreign sourcing/acquisition (Contd)
• Risks of acquisition
- Resource nationalism (the tendency of people and governments to assert control over natural resources
located on their territory.)
- Govts & societies wary of letting go their precious mineral resources
- Imposition of conditions like
(a) Export restriction
(b) Value addition within country
(c) Technology transfer
(d) Partnership with locals
(e) Higher taxes
(f) Production sharing
(g) Stability of govt & policies
(h) Expropriation (No 1 risk in 2012 according to E & Y)
(i) Erroneous understanding of local politics, laws, mafia etc.
(j) Communication with local people
 Options for mineral raw material security
Foreign sourcing/acquisition (Contd)
• Most important tool to zero in on the most suitable country for acquisition is Policy
Potential Index (PPI) of Fraser Institute.
• PPI based on a survey taking into account:
- Regulations and their administration and the uncertainty concerning them
- Environmental regulations
- Taxation regime
- Problems of acquisition related to land and R & R (e.g. native land claims)
- Infrastructure
- Socioeconomics
- Political stability
- Labour laws
- Geological database (quality & scale of maps and ease of access)
- Security
 Options for mineral raw material security Contd
Technology options
• Aim at extending life indices of mineral resources & ensuring supply of raw
materials for longer periods
• Involve exploration & mining with the help of newer technologies and expanding
the frontiers of human reach to greater depths on land than at present and to
oceans and space
• R,D & I focus on
- ICT-based processing
- Minimally invasive technologies (endoscopic mining)
- 4-D modelling
- Virtual reality applications (for detection & mapping of mineral
occurrences at greater depths or in difficult formations
- Computer tomography of drill-core samples (e-exploration)
Critical raw materials and the circular economy

Mathieux, F., Ardente, F., Bobba, S., Nuss, P., Blengini, G., Alves Dias, P., Blagoeva, D., Torres De Matos, C., Wittmer, D., Pavel, C., Hamor, T., Saveyn,
H., Gawlik, B., Orveillon, G., Huygens, D., Garbarino, E., Tzimas, E., Bouraoui, F. and Solar, S., Critical Raw Materials and the Circular Economy –
Background report. JRC Science-for-policy report, EUR 28832 EN, Publications Office of the European Union, Luxembourg, 2017, ISBN 978-92-79-
74282-8 doi:10.2760/378123 JRC108710.
Table 1. The 2017 List of Critical Raw Materials to the EU (EC, 2017a).
(HREEs = heavy rare earth elements (1), LREEs = light rare earth elements (2), PGMs =
platinum group metals (3))

Critical raw materials

Antimony Fluorspar LREEs Phosphorus
Baryte Gallium Magnesium Scandium
Beryllium Germanium Natural graphite Silicon metal
Bismuth Hafnium Natural rubber Tantalum
Borate Helium Niobium Tungsten
Cobalt HREEs PGMs Vanadium
Coking coal Indium Phosphate rock

The Democratic Republic of the Congo (DRC) is the world’s largest producer of cobalt and holds more than 50 percent of the global
cobalt reserves. Cobalt is used in lithium-ion batteries that form an integral part of electric automobiles, mobile phones and laptop
computers. Demand for cobalt is expected to rise significantly over the coming years. Cobalt is extracted in mechanized and
artisanal mining operations. Multiple reports have highlighted concerns over social and environmental impacts of cobalt
extraction, including child labor and unsafe working conditions in artisanal cobalt mining.
(http://www.responsiblemineralsinitiative.org/minerals-due-diligence/cobalt/)

Tantalum is extensively used in products that require high reliability in extreme environments. The metal is commonly found in
capacitors and super alloys that are applied in many electronics, automotive and aerospace products. More than half of the world’s
tantalum is mined in Africa, including artisanal mining operations in the Democratic Republic of the Congo (DRC) and its neighboring
countries. Tantalum is covered by regulations related to “conflict minerals” in the United States and the European Union.

indium, that is massively used in flat display panels

 The end-of-life recycling input rate (EOL-RIR) measures how much of the total material
input into the production system comes from recycling of ‘old scrap’ (i.e. post-
consumer scrap)

Although several CRMs have high recycling potential, and despite the encouragement
from governments to move towards a circular economy, the EOL-RIR of CRMs is
generally low

Figure 1. Current contribution of recycling to meet EU demand of CRMs: end-of-life recycling Input Rate (EOL-RIR). Source: JRC
elaboration based on (Deloitte Sustainability, 2015) and (Deloitte Sustainability et al., 2017)).

The Bureau of International Recycling (BIR) is the only global recycling industry federation representing around 800 companies
and 35 affiliated national recycling associations from 70 different countries. Its members are world leaders in the supply of raw
materials and a key pillar for sustainable economic development.
Major Critical Mineral Operating and Developing Mines in Australia
Diplomatic ties between countries play a crucial role in international trade relations, specifically in the
acquisition of overseas mining rights and their development, and can have a telling impact on long-term
security of resource supply. Strategic diplomatic efforts help to mitigate risks on the supply side.
 Political viability analysis

• Politics goes beyond the rigid boundaries of legal, economic or technological justifications
• Deals with peoples’ perceptions, emotions & empathy
• Factors:
(a) Land crunch
(b) Increasing political consciousness of people w.r.t. their rights & govts’
obligations
(c) Diversity amongst different states & People w.r.t.
- Political systems
- Religious beliefs
- Language
- Culture
- traditions
- Ritualistic practices
• Public movements & agitations again mineral development projects increasing
• Consequently, gestation periods of projects lengthening indefinitely as never before
 Government policies

• At least 4 policies: -
1. Mineral policy (Through MMDR Act)
2. Environmental policy
3. Fiscal policy (Tax laws & exim duties to encourage or
discourage exploration & mining activities; models for
mineral sector development like PPP etc.)
4. Foreign policy (international agreements, engaging
professional lobbyists, global intelligence network through
the embassies)
Thank you